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Should we be forced to buy auto insurance?

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Things to Remember...

  • Excluding New Hampshire, it’s illegal to drive without auto insurance
  • Each state has a minimum amount of auto insurance coverage needed to operate a vehicle
  • Motorists usually need to have a minimum of liability insurance to comply with the state laws

Whether or not drivers should be forced to buy auto insurance is a deeply debated topic. Those who believe that drivers should be required to buy coverage say that driving is a privilege, not a right.

They believe that insurance protects other driver and bystanders and should be mandatory.

Opponents to enforced auto insurance coverage argue that no one should be made to buy anything they do not want to. For this reason, the state of New Hampshire remains the only state that does not require some form of mandatory auto insurance.

Each U.S. state, except NH, has its own minimum requirements for auto insurance. Motorists usually need to have a minimum of liability insurance to comply with the state laws. There are several reasons why these minimums are in place.

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Why do I need liability insurance?

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Liability insurance requirements exist to protect you financially in the event of a car accident.

In the event that you are at-fault for an accident that causes injury or damage to another motorist, you may be liable to cover damages and medical expenses.

Having automobile liability insurance protects you when an accident happens.

Liability insurance will not cover damages to your vehicle or your medical expenses.

It will ensure that you don’t have to cover any potential medical bills that result from bodily injury to the passengers in the other vehicle.

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Why do states require liability insurance?

Injuries and fatalities are potential ramifications of automobile accidents. States sets these minimums to ensure that injuries sustained from these accidents can be properly treated. Without the insurance, there are only two other options available:

States sets these minimums to ensure that injuries sustained from these accidents can be properly treated.

Without the insurance, there are only two other options available:

  • The first is that the person injured in the accident is not treated for his or her injury.
  • The second option is that the person is treated, and the large medical bill is sent in the mail. If the person doesn’t have the funds or the capability of paying the medical bill, it goes unpaid and credit is damaged.

There are several modes of public transportation that can be used without having to obtain auto insurance. Driving is one option.

As a motorist on the roadway, you have the potential to cause damage and bodily injury to other motorists and pedestrians. Insurance minimums help to protect pedestrians, passengers, and other drivers in the event that they are hurt from an automobile accident.

Most states do allow you to drive with only liability insurance. This does not protect you in the event of an accident.

Driving with only liability insurance means you still run the risk of high medical expenses and automobile damages.

It is for this reason that many believe you should be forced to buy a minimum of liability insurance to protect others that may be harmed if you become involved in an accident.

Should we be forced to have full coverage auto insurance?

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States do not set laws that require full coverage on your automobile. There really is not any debate on this point since full coverage only protects you and your vehicle.

There are instances in which you may be forced to purchase a full coverage automobile policy. If you have a lien against your vehicle, you will likely be required to have collision and comprehensive coverage.

The bank or institution where your vehicle is financed needs to protect their investment.

Until you pay the loan in full, the vehicle is partially owned by the bank. If you become delinquent on the loan, the bank has the right to repossess the car.

If your auto is totaled, it becomes less likely that you will consider the payment to the bank as an obligation.

Financial institutions know that you are less likely to pay for something that you don’t have, or for something that doesn’t work.

If you become delinquent on your loan, the bank won’t have anything to repossess to recover the lost revenue.

Your auto insurance company will compensate you for the value of your car when the accident happens. If the value is worth more than what you owe on your loan, then you will be given the difference.

If the value of the vehicle is less than what you owe on the vehicle you are expected to pay the difference unless you have a GAP insurance policy.

If you have a loan on your vehicle, the financial institution has the right to require you to carry full coverage. If you own the vehicle, you have the right to carry the minimum insurance required by your state.

This gives you an opportunity to save money on your premium.

You will need to determine if the risk of not having full coverage is worth the savings on your auto insurance premium.

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